Apply For First-Time Home Buyer Mortgage
What is a First-Time Home Buyer Mortgage?
If you are purchasing your first home, this is an exciting time in your life – but getting your first-time home buyer mortgage can feel complicated. You may not think that you are going to move within the first five years – and as such, portability in your mortgage (the ability to shift your mortgage to another property) may not be a very big concern.
But because you don’t know exactly what the future is going to hold, you shouldn’t discount the portability option completely. Your mortgage agent can help you with portability options that still get you the lender’s best rates and give you the ability to add money to your mortgage if you need to in order to upgrade your home.
How It Works
What are the Rules for the Down Payment?
For homes valued up to $500,000, you will be required to put a down payment of 5%. On any portion of the home that is above $500,000, the buyer will have to put an additional 10% down payment.
Example:
If you are purchasing a home that is $700,000, the down payment is calculated as follows:
5% on first $500,000 = $25,000
10% on next $200,000 + $20,000
Total down payment = $45,000
Options for your First Time Home Buyers Mortgage
When you get your first-time home buyer’s mortgage, you will have a number of options that you will want to consider. These include:
Portability –
The ability to transfer your mortgage to another property if you live in your first home for less than five years.
Low-Frills Mortgage –
This can be a good option as long as you don’t plan to move, refinance, or make a lot of large prepayments within the next five years.
Extra Savings –
Most first-time home buyers choose a 5 year fixed mortgage to avoid risking rising interest rates.
Hybrid Mortgage –
If you choose a variable rate mortgage, you can still choose one that keeps the payments the same which makes it easier for budgeting.


Tips for First-Time Home Buyers
Now that you are buying your first home, good financial management is going to be more important than ever. Here are a few tips if you are a first-time home buyer.
Getting a mortgage means that you’ll be taking on more debt, but you need to consider how your mortgage is going to affect your ability to pay the debts that you already have. When you sit down with your mortgage agent, they should take your current debts into consideration when calculating how much of a mortgage you can afford to take on.
There are many buying costs when purchasing your first home, and many first-time home buyers underestimate those costs. In addition to your down payment, there are also legal fees, mortgage insurance, etc. Make sure to budget for these.
You don’t have to get into a mortgage at the top of your price range. If you decide to take out a mortgage for a lower amount than you are approved for, you will have more money available for the other expenses of owning a home.
Although most Canadians go for a five-year fixed rate mortgage, that doesn’t mean that’s the best option for you. If you can handle a little volatility, a variable rate mortgage may save you money on interest. Talk to your mortgage agent about your options.
Although you can probably get a mortgage through your regular financial institution, you may not get the best rate there. When you work with a mortgage agent, they will compare rates on your behalf to help you get the best deal on your mortgage.
Using the First-Time Home Buyers Plan
If you have been working and investing into RRSPs, the Canadian Government offers a program that allows you to borrow from your RRSPs in order to help pay for you down payment. Through the Home Buyers’ Plan (HBP), first-time buyers are able to borrow up to $25,000 tax free from their retirement savings. If you are married, then both you and your spouse may participate in the HBP and borrow up to $50,000.
The loan must be paid back into your RRSP within the following 15 years. (If it is not, it will be considered a withdrawal from your RRSP and will be taxed accordingly).
In order to participate in the HBP, the money you borrow from your RRSP must have been put in at least 90 days before the withdrawal and the withdrawal must be made at least 30 days before you take the title of the home. Repayments must then be made within the next two years.
Your mortgage agent can help you obtain the necessary forms to participate in the HBP if you choose to do so.

Contact Harpreet Puri Mortgage today!
If you are a first-time home buyer looking for a mortgage, we are here to help. Contact Harpreet Puri Mortgage today.
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